At The Peak? Spotlight On The Eastern Suburbs - July 2021
By Guest Blogger, Leanne Pilkington, CEO,
Laing & Simmons and President REINSW
Since the housing market rebound in the second half of 2020, metropolitan and regional areas across New South Wales have experienced varying levels of growth but few have seen as pronounced an uplift as the eastern suburbs.
This month, REINSW President and Laing+Simmons CEO Leanne Pilkington takes a look at whether the enduring crown of Sydney real estate has yet reached its peak.
Speak to agents in Sydney’s eastern suburbs and many will say the market in 2021 is nothing like they’ve ever seen. Price growth has been significant, with freestanding houses and larger apartments in particular in huge demand.
Buyers looking at the prestige suburbs know they need money and at the moment, money is cheap. Homes that do become available are being snapped up very quickly, buyers are willing to pay a premium and, for the moment, there’s nothing to suggest these fundamentals will change any time soon.
Local agents who do their job well will have a very healthy database of buyers looking for top-end homes and the only issue is the shortage of stock. And, of course, lockdown restrictions.
However, lockdown is revealing some interesting trends in the east. Buyers who do make enquiries are genuine. Same goes for renters. For properties which do become available, whether for sale or lease, and with no inspections possible, those interested are typically prepared to act decisively.
Private inspections are allowed and the conversion rate of these inspections to transactions is huge. So much so that even when lockdown ends, there’s a case to be made for agents to continue to offer private inspections where a quick sale is the objective.
The market for apartments in the east has remained strong through the pandemic. Laing+Simmons agents report more buyers from out of the area are looking at larger options, and we’ve even seen overseas investors focusing on areas like Potts Point and Darlinghurst.
With the market for freestanding homes so intense, many buyers looking in the east are shifting their attention to larger apartments of two or three bedrooms and are likewise willing to pay a premium.
For smaller apartments, rentals and price growth have been flat in comparison, although when the vaccine rollout achieves broader coverage and borders eventually re-open, this is a segment of the market which could experience a sharper rebound.
With so many families eager to move into the area, encouraged by cheap finance, it will test the willingness of locals to downsize to apartments to support new developments. People who live in the east typically don’t want to leave, but the choice to move within the area is limited with such short supply.
The combination of these factors means the eastern suburbs market is likely not yet at its peak. Demand for larger properties is extremely pent-up and demand for smaller properties has room to grow once life, eventually, starts to return to normal.
This of course makes it difficult for people on low to middle incomes looking to enter the market. With choice so constrained, and lots of money in competition, the main opportunity for buyers is in the smaller apartments segment and new projects, but they will still need to come prepared.
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